GRAIN BROKERS
MARKETS
El Niño years Market opportunities
By Frans Dreyer
Manager: Senwes Grain Brokers By Hansie Swanepoel
Senwes Grainlink Market analist
THIS ARTICLE IS the fourth in a series in which we look at
the background, origin and development of ENSO (El Niño
Southern Oscillation) events. The previous edition focused on
the specific classification of ENSO in the form of a medium to
strong El Niño event.
The current season is officially classified as a weak El
Niño type season. The season thus far has been the oppo-
site of what is expected of El Niño seasons. An El Niño type
season is normally a bit wetter in the early part of the year
and dryer later in the year. The early part of the season was
dryer than what it had been since the 1915/16 season in
various districts. Autumn, particularly in respect of April rain,
was the wettest since accurate rainfall records commenced.
This applied in respect of particularly the western part of the
Senwes area.
This realisation confirms that it would always be risky to
base production or marketing decisions on the historic devel-
opment of ENSO events only. The first reason for this is that
the occurrence of El Niño, La Niña and neutral types of sea-
sons is reasonably random. PRODUCERS ARE AT the point where they have to make deci-
sions about the tonnages harvested - should it be marketed or
should it be bought back in the market? The possibilities in this
regard are:
for producers after the harvest
What happened in the past?
Die voorkoms van El Niño, La Niña en neutrale episodes (1923-2019
La Niña El Niño Neutraal
Voorkoms van die episodes
Aantal kere ’n groter oes as
bewegende gemiddeld 29
17 34
10 33
22
Aantal kere ’n kleiner oes as
bewegende gemiddeld 6 17 10
Maksimum positiewe afwyking op
lopende gemiddeld 46.8% 35.1% 55.1%
Maksimum negatiewe afwyking
op lopende gemiddeld 13.1% 59.30% 20.1%
121.85% 83.84% 110.6%
Opbrengsrealisasie as % van
gemiddelde opbrengs.
When focusing on La Niña events and the impact of such
seasons on yield potential, the picture is as follows:
La Niña seasons normally realise higher yields than the
5-year running average yields. There has been a few excep-
tions in the past. Producers approach a La Niña type season
with more confidence since it is usually a more moderate
season, with yields being more stable.
Read the full article by clicking on the link http://
senwes.co/frans19 or scan the QR code.
32
SENWES SCENARIO | WINTER 2019
Harvest and sell
Buy back in the market
Storage with the possibility of selling at a later stage
The market this year is characterised by maize closing stock levels
which should be sufficient (as at the time of writing) to meet the
current needs. However, there is room for upward and downward
movements over the course of the season.
Oilseed closing stock levels should be fairly low and there is suffi-
cient room for price movements.
Table 1: NAMC 2019/20 supply and demand figures (3 May)
White Maize Yellow Maize
Total Maize
Hectares Planted
Yield
CEC Crop Estimate
CEC Retention 1 298 400
4.07
5 286 540
160 000 1 002 100
5.36
5 368 820
350 000 2 300 500
4.63
10 655 360
510 000
Opening Stock
Producer deliveries
Imports
Early Deliveries (Nett)
Surplus
Total Supply 1 824 084
5 126 540
-
20 000
5 000
6 975 624 969 575
5 018 820
450 000
-
10 000
6 448 395 2 793 659
10 145 360
450 000
20 000
15 000
13 424 019
Processed for local market
-human
-animal
-gristing
Other
Local Demand 5 482 000
4 650 000
820 000
12 000
44 000
5 526 000 5 216
545
4 660
11
195
5 411 500
000
000
500
000
500 10 698 500
5 195 000
5 480 000
23 500
239 000
10 937 500
Exports
Products
Whole maize
Total Demand 620
70
550
6 146 400
150
250
5 811 000
000
000
500 1 020
220
800
11 957
000
000
000
000
000
000
000
500
Ending Stock 829 624 636 895 1 466 519
Processed per month (local)
Months’ stock
Days’ stock 456 833
1.8
55 434 708
1.5
45 891 542
1.6
50
Read the full article by clicking on the link http://senwes.
co/hansie19 or scan the QR code.